Regionals: Skid Row fallout

Several legal cases are drawing to a close for two former Los Angeles hospital owners accused of filling beds with patients recruited from the area known as Skid Row. But the matter appears far from over.

Rudra Sabaratnam and Robert Bourseau last week agreed to pay the U.S. and California $10 million in a consent judgment resolving a federal False Claims Act lawsuit. Sabaratnam, who was the CEO of City of Angeles Medical Center, and Bourseau, who was its chairman, previously pleaded guilty to related criminal charges and await sentencing.

A civil case alleging the same scam is moving along in California Superior Court in Los Angeles. The Los Angeles city attorney’s office has dropped a February trial date and signaled to the court that tentative settlement agreements have been reached with Sabaratnam and Estill Mitts, who pleaded guilty to federal charges for running a sham assessment center that was the primary source of the bogus patients.

Bourseau has failed to answer the city attorney’s complaint, and the office is working with the judge toward a default judgment against him, said Assistant City Attorney James Colbert.

According to the city attorney’s office, Mitts’ 7th Street Christian Day Center also sent patients to Tustin (Calif.) Hospital and Medical Center and L.A. Metropolitan Medical Center, both owned by for-profit Pacific Health Corp., whose CEO, James Young, was just recently named and served in the lawsuit.

Young, who could not be reached for comment, was among 17 defendants the city attorney’s office newly identified in court documents. Others were ambulance employees, physicians who admitted patients to City of Angels, and workers for Mitts’ operation. More may be named later. The lawsuit as it pertains to the Pacific Health hospitals and officers has been stayed for the past year in order to avoid interfering with the federal prosecutors’ criminal investigation of those defendants.

Duane Lyons, a lawyer representing Pacific Health, declined to comment. The city attorney’s office recently asked the judge to lift the stay, saying their federal counterparts agree that the case should proceed. Attorneys for Pacific Health argued that it would be unfair to move forward because the U.S. attorney’s office hasn’t allowed them depose Mitts.

A spokesman for the U.S. attorney’s office said the investigation is active and ongoing and includes the Pacific Health side of the case.

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